What these closet Marxists don't get is that government produces NOTHING. Wealth and prosperity originates in the private sector. All these countries who have shifted toward government control of capital are tanking...

"Spain fell into an economic downturn in 2008 due to the collapse of its housing market, and economic conditions worsened when it became clear how entrenched the country&#8217;s unregulated savings banks were in the real estate market."

Just like here, the economic collapse in Spain was caused by the PRIVATE SECTOR / housing market and banks.

"III. Spain: A Flourishing Economy

In order to join the EU, the Maastricht Treaty requires that countries converge on certain criteria, including interest rates, inflation rates, and government deficits. Since 1990, Spain had faced budget deficits as large as 6.5% of GDP. Because of the strict requirements in the Maastricht Treaty, by 2005 the Spanish government began posting budget surpluses.

The Maastricht Treaty also called for Spain to reduce its long-term interest rates. As a result, businesses and individuals saw their borrowing capacities increase because they could afford paying loans with lower interest rates. More people, especially those in their twenties who had recently graduated from a university, took out loans to purchase homes. Traditionally in Spain, the younger generation lived with their families after school until they married, but in the past ten years, more bought their own residences before marriage because obtaining credit was easy and interest rates were low.

The construction market flourished because of the increased demand for housing. As more Spaniards bought houses, more construction companies required unskilled labor which prompted an increase in immigration to Spain&#8217;s labor market. From 2000-2008, Spain&#8217;s population grew from 40 million to 45 million, and from 1999 until 2007 the Spanish economy created more than one-third of all employment generated in the Eurozone. As more immigrants came to Spain, more housing was necessary and the cycle continued. During this time, prices of houses increased dramatically, as did the number of loans used to purchase them. The construction market continued to build, heedless that the growing housing market would inevitably begin to cool.

IV. Crisis in Spain

Because of the dramatic increase in construction of new homes and the long time between the beginning and end of a construction project, by the time the demand for housing had slowed in 2007, available housing was just reaching its peak. By this time, construction accounted for 13 percent of total employment in Spain. When prices began falling and housing demand halted, unemployment jumped up 10 percent.

As unemployment skyrocketed, so did unemployment benefits. In a welfare state like Spain, unemployment benefits are generous. However, what was a sustainable unemployment level quickly became a drain on the Spanish government. The reduction in the Spanish government&#8217;s tax revenue, which is heavily dependent on real estate, exacerbated the problem. These drains on the economy turned a previous budget surplus of over 2 percent of GDP into a deficit of almost 4 percent of GDP, violating the limits of the Pact."

Well gosh, I'm sorry. You did NOT imply Spain wasn't spending enough when you stated "Spain's been in austerity mode for over a year - watching their economy collapse as they attempt to cut, cut and more cut their way to prosperity."?

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